Aggressive Alternative Fuel Vehicle Incentives Getting Traction In The Deep South

8566_picresized_1362082275_110899380 Aggressive Alternative Fuel Vehicle Incentives Getting Traction In The Deep South The Mississippi House of Representatives passed legislation this week that could pave a course for the greater adoption of alternative fuel vehicles in the state and help create a robust refueling network for these vehicles.

Perhaps the most notable feature of the bills being considered in the legislature is the all-encompassing nature of the incentives. All taxpayers – both individuals and businesses – are eligible. All vehicle types – from light-duty passenger vehicles to the heaviest of the heavy on-road trucks and tractors – are eligible.

The first bill, H.B.765, drew an overwhelmingly bipartisan 117-1 affirmative vote. Central to the legislation is a state income tax credit for those who purchase OEM alt-fuel vehicles or convert existing assets to run on alternative fuels (defined as compressed natural gas (CNG), liquefied natural gas (LNG), propane autogas and hydrogen).

The credit is 50% of the cost of ‘alternative fuel motor vehicle fuel property.’ In other words, a $10,000 CNG fuel system conversion will be eligible for a $5,000 credit. Or, the 50% credit applies to the incremental cost of acquiring a new OEM-equipped alt-fuel vehicle versus an equivalent gasoline- or diesel-powered vehicle.

H.B.765 includes similar provisions for the installation of home- and business-based refueling systems, as well as public and private refueling stations. The credit is 50% of the cost to install and/or construct alternative refueling infrastructure, capped at $500,000.

The legislation very clearly spells out lawmakers' goals: At least one public-access alternative fuel station every 100 miles along Mississippi interstates by the end of 2018 (and ramping up to one every 50 miles by 2023), and at least one public-access station every 100 miles along the U.S. highways in the state by 2023 (increasing to one every 50 miles by 2028.

In terms of the top end of the overall program, legislators opted to not cap the incentives at a specific dollar figure at this time.

‘The House was willing to set this up without those caps,’ says Kent Meadows, vice president of NGV Solutions, a Mississippi-based firm that performs natural gas vehicle conversions and installs refueling equipment for fleets. ‘They recognize how slowly this process starts.’

Another bill, H.B.1685, also passed in the House by a wide margin, 116-3. This piece of legislation would create the Mississippi Governmental Entities Alternative Fuel Vehicles Revolving Loan Fund, designed specifically to help state, county, municipal, school and other fleets secure funds to buy OEM propane, CNG or LNG vehicles or to perform alt-fuel conversions, as well as to install refueling equipment.

The fund would be set at $5 million, and loans would carry no interest. Each governmental body will coordinate loan repayment terms with the Mississippi Development Authority based on the fleet's level of fuel savings and other parameters.

Both of the bills will now be considered in the state Senate. The schedule has not yet been set, but Mississippi's legislative session ends on April 7. Action is coming soon.

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